Tuesday, May 23, 2006

JupiterResearch: Nike + Apple = iPod as a platform

Michael Gartenberg posts at Jupiter Analyst Weblogs about Nike (NKE) and Apple (AAPL) teaming up to launch Nike+iPod products.

According to the press release, the first product will be the Nike+iPod Sport Kit, a wireless system that allows Nike+ footwear to talk with an iPod nano to store information on time, distance, calories burned and pace for display on the screen together with real-time audible feedback through headphones.

The kit includes an in-shoe sensor and a receiver that attaches to iPod. A new Nike Sport Music section on the iTunes® Music Store and a new nikeplus.com personal service site help maximize the Nike+iPod experience.

Gartenberg opines:

This is pretty big news. While there's a lot of things to talk about from a co-branding perspective, it also underscores the whole nature of the iPod as not just a device but a cornerstone for the digital lifestyle. It also drives home the power of the iPod as a platform that can be built on. I've already talked about the notion of a BMW or Mercedes as iPod accessories. Now you can count Nike sneakers into that category as well. Another nice win for both Apple and Nike and another way that they continue to differentiate the product relative to the competition.
From a market standpoint, I tend to agree with Gartenberg. Apple and Nike together makes sense. Two very formidable lifestyle brands teaming up, which is especially good for Nike because it hasn't fared so well in the consumer electronic devices space in the past.

But it's the long-time runner in me that has mixed feelings on the execution and usage model of the inital product. If you own a nano and run with it then shelling out $29 for the Nike+iPod Sport Kit seems on the surface to be a good idea.

However, Spike Lee's Mars Blackman once said a long time ago, "It's gotta be the shoes!" And this is exactly what I don't like about the product. Right now, you're locked into purchasing the upcoming Nike+ line of footwear for all of this to work.

The Nike+ footwear uses a special foot pod accelerometer that sits under the shoe liner for measuring distance and pace. I personally prefer GPS technology to achieve this, but that's neither here nor there.

As usual Nike seems to be targeting the cool and trendy market for this product so if you only wear Nike then you're in luck. But most runners are a strange lot and running shoe fit and performance is very subjective and extremely important at the end of the day. Carrying a nano can't get you injured (unless you're not paying attention or get mugged), but wearing the wrong type of running shoe can.

While some runners favor only one brand, many others wear multiple brands, such as Adidas, Asics, Avia, Brooks, Mizuno, New Balance, Nike and Saucony, in the ongoing quest to find the perfect shoe.

In my case, I currently rotate several pairs of shoes from Mizuno and New Balance for my daily training, and I'm not unique in this respect. I haven't worn Nike's in years because I don't like they way they feel.

So unless Nike comes out with a shoe that works for me, I'm currently locked out of the Nike+iPod Sport Kit. For Apple to reach the widest possible audience it would make more sense for the foot pod to be portable so runners can easily attach it to all the shoes in their stable. In fact, they really don't need Nike for this and could develop a little GPS module to connect to the nano as well. Nike is big, but the overall running shoe market is bigger.

As for Nike, the closed model approach seems smart although they could probably move a lot of Nike+iPod Sport Kits with a standalone foot pod too. As for me I'll just stick with my Garmin Forerunner 205 for now...

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